The government's new plan to bail out homeowners who have defaulted on their mortgage is a fairly simple one. Banks cut the interest rate of borrowers who can't afford their current mortgage to get their mortgage payment down to a level that is somewhere between 31 and 38 percent of their income. This new rate will last for the next five years. As an example, a family with an annual income of $50,000 would end up with a mortgage payment between $1300 and $1600 a month for the next five years. (For people who qualify for the government program, rather than through a program with a private lender not backed by the government, the 31% figure should hold.) After that time the rate may increase no more than one percentage point per year until it reaches the rate cap indicated in the modifica... 04/21/2009

Competition in some rental markets is pushing landlords to offer increasingly creative concessions to tenants, such as free rent for a month or two, and even job-loss protection that guarantees the rent will be paid if tenants lose their jobs. A new survey by a real estate research company confirms that landlords nationwide are being forced to lower what they charge their customers, whether through direct rent reductions or freebies and breaks on lease terms that have the same net result. New York-based REIS, Inc. reports that half of all apartment buildings in the U.S. reduced rents in the fourth quarter of 2008 and the first quarter of this year, according to Business Week. Rents quoted by landlords dropped by six tenths of a percent in the first three months of 2009, and effective re... 04/20/2009

For many people, buying their own home is still the American dream. Yet, it remains out of reach for a lot of people, even though the housing affordability index in many areas of the country is as good as it's ever been. But if you're not prepared to buy a house, then the index doesn't mean a thing to you—except, perhaps, to create a painful sting and a constant reminder that you're missing out on a good opportunity to buy real estate at lower prices. For more on affordability, see my column, Housing Most Affordable: May be Time to Move from Renting to Owning. That's advice that many experts are giving to those who are planning to stay in the same house for a few years. The cost of buying and relocating in a short period (a couple years) can make the concept of buying not appealing or c... 04/17/2009

Every commercial loan broker will tell you that the banks are not making a whole lot of commercial loans these days. Surprisingly, the reason why isn't just because they are afraid to make new commercial loans.  Another important reason is that many banks are fully-invested. In plain English, they simply don't have the money to make many new commercial loans. This lack of liquidity is not the result of loan losses associated with the subprime meltdown. Few small banks were involved in the deal-flow of subprime loans. When the music suddenly stopped, the small banks were not left holding a huge volume of unsold subprime residential loans. It is easy, therefore, to assume that the small banks should have plenty of money to lend. In fact, the opposite is true. Banks have always preferred t... 04/16/2009

Thirty years ago homes were built completely differently than what they are today, but there was a passing concern that they be energy efficient and, of course, safe.  They featured appliances with green dots to indicate energy efficiency, had windows that promised to save money on our heating and cooling bills, and hot water heaters with energy-saving features.  Times change and so do scientific theories that filter down into our lives.  Now we know more about what affects our health and the environment and we are going green.  We have better ways of making homes more energy efficient.  Home buyers want homes that reflect these trends. Here are some very modern "green" ways to spark up an older house that will qualify you for an energy credit now under the new stimulus bill and be a se... 04/16/2009

Understandably, homeowners who apply for a loan modification tend to get a little antsy and perhaps even annoyed when they apply for a loan modification and then fail to hear anything for several weeks, especially if they continue to receive late payment notices and nasty phone calls from collection agencies. Many homeowners wonder, “How long will it be before I hear anything?” and “What should I do while I’m waiting.” This article should help answer those very pressing questions. How long will it take? The loan modification process typically takes 30 to 90 days, depending mostly on your lender and your ability to efficiently work through the process with your attorney or other loan modification representative. Note: The loan modification timeline is not set in stone. The more complex y... 04/14/2009

What are you doing to take advantage of the new energy efficiency tax credits? A couple months ago President Obama signed into law a stimulus package that can help make your home more energy efficient as well as give you a nice tax deduction. Anyone who takes advantage of this write off will save up to 30% off the cost of new windows, doors, energy efficient HVAC systems, water heaters, and more, up to $1,500. By making your home more efficient you will be saving money in the long run, so why not grab a deduction for it? There are of course some stipulations to the products being bought. To qualify, these energy efficient doors, windows and skylights must have a U-factor and Solar Heat Gain Coeffient ((SHGC) less than or equal to 0.30. It is important to do your research before making a... 04/14/2009

We are all pre-programmed with hope. That's a good thing. We all need the hope that we can accomplish our goals and objectives; that our circumstances in life will improve; that we will achieve the position of wealth and happiness we dream about for our family and ourselves. When that hope is not connected to action, we are entrenched in the lotto mindset.The lotto mindset is when hope and action never intersect. To experience true success in one's life, hope must intersect with action. Due to the vibrancy of the real estate market in the last few years, the lotto mindset has been more pervasive than ever. The lotto mindset tells us there is a winning ticket out there; that for a few bucks and a trip to our corner store we can win a $300 million dollar jackpot.Studies have shown that mo... 04/13/2009

Falling housing prices, historically low interest rates, and tax credits are creating an enticing environment for renters to convert to homeowners."We are still going to have a tremendous amount of foreclosures, price declines, and best opportunities to buy properties at amazing prices," says Bruce Norris of The Norris Group.If that sounds like a mixed bag of bad and good, indeed it is. Consumers have been inundated with news about a troubled real estate market. "If you look at the closings for California, 55 percent or more closings every month are lender-owned properties; that ratio has never existed before. So, the lenders are really dictating the prices at this point and there are so many [lender-owned properties] that the appraiser almost has no choice but to give that comp a lot o... 04/10/2009

If you're trying to sell your home, you know the realtor could call for a showing at any time. Trying to keep a house clean for open house days can be a little stressful, but following a short daily routine may prove helpful. Luckily for the seller, if the house is well kept, this routine should take about 20 - 30 minutes to complete. Starting will be easiest in the kitchen. Load the dishwasher, wipe down the stove, the countertops, the front of the fridge, and wipe out the sink. Keep your sink shiny. This shows potential buyers cleanliness. Finally, sweep or Swiffer the floor to tidy up the room. Next, move to the bathroom. Take some Clorox wipes or cleaner of your choice, and wipe down the sink and countertops and toilet seat and rim. Clean the mirror and faucet. Take your toilet brus... 04/09/2009

Modern homebuyers will inevitably come across one or more properties currently classified as a short sale. A short sale is an attempt by the current owner to sell a home in lieu of the bank taking it back through foreclosure proceedings, thus partially salvaging their credit rating and lifting the burden of heavy mortgage debt. The entire short sale process hinges on the hope that the bank will take a loss now, approve the sale, and eliminate the costly process of foreclosing, clearing, and reselling a home. Obviously, this is a big hope on behalf of prospective homebuyers as well and they need to understand some things in order to lessen the chance for disappointment of unapproved short sales. This is what they should know: 1. Price is usually set by the agent & seller, not bank: The a... 04/09/2009

A massive new mortgage reform bill has Washington real estate and banking groups buzzing, both critically and in favor. The bill was introduced last week by House financial services committee chairman Barney Frank -- who's arguably the most influential legislator on housing issues on Capitol Hill. Supporters say the 151-page bill would have gone a long way to preventing mortgage lending excesses during the housing boom, especially no-documentation, negative amortization and zero downpayment deals, had it been federal law before the boom started in 2002 or 2003. The bill, which is expected to pass the House easily this month and go to the Senate in May, would change home mortgage lending fundamentally. Here's how. It would discourage lenders from making anything but "plain vanilla" 30-ye... 04/07/2009

Purchases of houses for investment purposes continued to be among the strongest segments of the real estate market last year -- and accounted for more than one out of five of all home sales in 2008. That's a key finding of the latest annual study on second homes and investment purchases conducted by the National Association of Realtors. The investor market share last year was 21 percent, the same as the year before, but down several points from the height of the housing boom in 2005 when it hit an all-time record of 28 percent. Second homes and vacation property purchases, on the other hand, dropped last year to just 9 percent of the total market, down from 14 percent in 2006 and 12 percent in 2007. What sort of properties were investors buying for rentals? Two out of three were detache... 04/06/2009

Purchases of houses for investment purposes continued to be among the strongest segments of the real estate market last year -- and accounted for more than one out of five of all home sales in 2008.That's a key finding of the latest annual study on second homes and investment purchases conducted by the National Association of Realtors.The investor market share last year was 21 percent, the same as the year before, but down several points from the height of the housing boom in 2005 when it hit an all-time record of 28 percent.Second homes and vacation property purchases, on the other hand, dropped last year to just 9 percent of the total market, down from 14 percent in 2006 and 12 percent in 2007.What sort of properties were investors buying for rentals? Two out of three were detached si... 04/03/2009

Pushed by a powerful combination of historically-low fixed mortgage rates, an $8,000 tax credit, and affordable prices, sales of existing homes jumped 5 percent in February compared with the same month last year.The biggest gains came in the Northeast, where sales were up by nearly 16 percent, according to the National Association of Realtors. Home sales in the South came in 6 percent higher for the month; they were up by nearly 3 percent in the Western states and one percent in the Midwest.Nationally, sales of condos rose faster than detached single family dwellings – 11.4 percent versus 4.4 percent.Underlying the improving sales picture were continuing declines in median sales prices. Dr. Lawrence Yun, chief economist for the National Association of Realtors, noted that the downward t... 04/01/2009

The price is often right to buy a foreclosed home these days, but should you?  These homes, flooding the local market, often offer features not available except in more costly homes.  There are also a few things to watch about this type of property sale. The homes are often owned by banks, or in some cases, by owners if the home is actually in "pre-foreclosure."  The banks usually offer foreclosures "as-is," since they have so many homes to sell.  As a result, the home might need TLC or major work, depending on how previous owners left the home, how long it has been vacant, and what its fate has been in the meantime. Unfortunately, former owners often leave the house in poor condition: what they don't steal to resell, they destroy.  Sometimes vandals finish the job and even run off with... 03/31/2009

Before closing the deal on your dream house, it is vital to have it inspected by a licensed home inspector. Your real estate agent can give you a list of inspectors for you to choose from. Do some homework on the inspectors. Check references. Some states are very strict on the qualifications to be a licensed home inspector; other states are not. A reputable inspector probably will belong to one of two national organizations:  The American Society of Home Inspectors or the National Association of Home Inspectors. If your first choice is booked up for while consider that a good sign. Just like good physicians are booked out, such is the case for great home inspectors. You or your representative should be present during the home inspection. Be prepared to spend several hours in this endeav... 03/25/2009

All of us have turned on the TV and at seen the commercials promising help to troubled borrowers who may be late on mortgage payments or facing foreclosure.  Many of the ads that flood our televisions, radios, and the internet are scams. Firms typically will charge a large fee of $1,000 or more and promising the borrower they will do the leg work and negotiate new terms with their current mortgage company.  Many borrowers are left with no changes on their mortgage and out even more money. The President's foreclosure prevention program that was just released may even open the door for more scams to flourish, but there is no need for this.  Mr. William Apgar, the senior advisor to Shaun Donovan, the President's new secretary of housing and development, states that borrowers should not pay... 03/23/2009

With more houses currently being listing on the market, you may be surprised what buyers are really looking for in their dream homes. Every potential buyer looks through many homes; sadly in the last twenty years, most houses have the same kinds of floor plans and the same kinds of outside design.  Sellers are counseled to make everything neutral, so even the insides are similar. Homebuyers just want something that jumps out at them and yells, "BUY ME".  For every buyer, this one compelling feature is different.  If your house has a unique feature, promote it to potential buyers. Architecture is a given. Some buyers are attracted to unusual architecture, whether it be a specific style of home: American Colonial, Victorian Colonial, Classical House Styles, Gilded Age Styles, Frank Lloyd ... 03/11/2009

Some potential homebuyers are sellers themselves. In a market where it often takes longer to sell a home and where it is harder to get the asking price, these buyers have a dilemma. Typically, homeowners that sell one home to buy another want to secure their replacement home first. The market makes it hard. Few people want to be straddled with two mortgages. Unfortunately new mortgage lender requirements make it even more difficult. In the past homeowners could purchase a new home before selling the old one by claiming rental income for the home that was being sold if it didn't sell. Now, most mortgage lenders will not consider rental income for unsold properties. The homebuyer can offer to purchase a new home contingent on the sale of their old one by having a clause to this effect put... 03/05/2009